TOURISM SECTOR

• Colombia is becoming one of the most important destinations for tourism inLatin America. According to the World Travel & Tourism Council (WTTC), realdemand for trips and tourism in Colombia is expected to increase from US$ 9,800million to US$ 14,300 million during 2006-2015, a real growth of 4.5% per year[1],greater than the growth rate of 4.1% expected for Latin America[2].

• The tourism sector currently accounts for 2.2% of total GDP in Colombia (US$2,700 million)[1], contributes 11.2% of total capital investments worth US$ 1,800million, and generates 380,000 direct jobs, equivalent to 2.2% of total employmentin the country.in the country.

• By 2015, the Colombian gross production of tourism sector is expected toreach US$ 6,600 million, reflecting a 9% growth. A US$ 5,500 million capitalinvestment is also expected for this year, with a generation of 540,000 direct jobs;equivalent to an employment growth of 3.5% per year.

[1] Ministry of Commerce, Industry and Tourism, tourist information system. Bulletin January, 2006. [1] This amount includes tourism spending both by local residents and international travellers, as well as business travel, public spending in the sector and

capital investment.[2] WTTC: inflation-adjusted real annual growth 2006-2015.

INVEST IN COLOMBIA

1. Colombia. Great destination for business and investment

2. World recognizesour work

3. Reasons to invest

1. Colombia. Great destination for business and investment

INVEST IN COLOMBIA

2.World recognizes our work

3. Reasons to invest

289%

170%125%

67%20%

189%

0

1

2

3

4

5

200

300

400

500

Investment in Hotels189 % growth y more than US $500 Million

Investment in Hotels and Restaurants(2002 – 2009) Millones de USD

-4

-3

-2

-1

0

100

200

Inversión Hotelera % Crecimiento

Fuente: Cotelco. Cifras Aproximadas

6,7%

11,5%

8%

10%

12%

14%

Growth rate of foreign visitors 2004-2008

With a growth rate of 11,5% since 2004, the interna tional tourism to Colombia grow more than worldwide rate 4 .9%. And

exceed growth rate of the region.

Fuente: Cotelco. Cifras Aproximadas

3,6%

4,7% 4,9% 5,3%

0%

2%

4%

6%

MEXICO REP DOMINICANA

MUNDO ECUADOR SURAMERICA COLOMBIA

Arrival Foreign Visitors to Colombia (2002 – 2008) T housandCheck Points and y Cruise ships (without cross – bor der

visitors)

In 2008 we received more than doubled of foreign visitors in 2002

1.104 1.322 1.451

Fuente: Departamento Administrativo de Seguridad – DAS*M: Meta. Fuente: Ministerio de Comercio, Industria y Turismo

661 668 840

981 1.104 1.322

2002 2003 2004 2005 2006 2007 2008

80% growth in cruise passengers arrival 2008

Cruise Ships arrival to Colombia

Cruise Ships Cruise passengers2002- 2008 2002 - 2008 (thousands)

161

150

200228,2

200

250

Fuente: SPRC, SPSM, Capitanía de Puerto San Andrés Isla Incluye: Cartagena, Santa Marta y San Andrés

* Proyección hecha por el Ministerio de Comercio, Industria y Turismo

84

55 5945 53

99

0

50

100

150

94,4

42,6 49,3 48,2 50,5

126,8

0

50

100

150

2002 2003 2004 2005 2006 2007 2008

Hotel occupancy rate in 2008

48,1

52,6

59

72,5

55,6

50

52,9

56,7

58,1

60,7

61,4

64,3

54,5

Atlántico Comercial

Barranquilla

Norte de Santander

Cartagena

San Andrés

Bogotá D.C.

PROMEDIO

43,3

38

52,1

44

44,6

44,9

43

44,6

49,9

51,1

52,3

52,9

Cafetera

Valle del Cauca

Influencia Bogotá

Antioquia

Santander

Atlántico Comercial

2008 2009 Ene-Feb

Fuentes: Cotelco

COLOMBIA, EXAMPLE TO FOLLOW

•“ Colombia, with the country

brand, show an excellent model

UNWTO CONGRATULATES COLOMBIA FOR THE TOURISM STRATEGY

to other countries that have

been facing analog situations”

Germán Porras Olalla (Ex secretary of Tourism of Spain) -UNWTO

10

1. Colombia. Great destination for business and investment

2. World recognizes our work

3. Reasons to invest

The world identified these results in the economy…

Media press registered our development

Once again, the world recognized Colombia as a great destination !!!

Bad Reputation, Great Destination : Bogota: This walkable metropolis of seven million is once again reclaiming its role as Latin America's

intellectual and cultural hub

THE HEADLINES

MAY 2009

THE HEADLINESFor well over a decade, few cities in the Americas inspired as much

bad press as Bogotá, Colombia. More than the capital of a country, it was a capital of crime, murder, kidnapping, and bombs; a place where the cartels dispatched their drugs, paramilitaries trafficked weapons,

and leftist rebels set their sights. The guerrillas welcomed current president Álvaro Uribe with a series of homemade mortar attacks on his inauguration in 2002, leaving 21 people dead in a slum near the

palace.

…”things are changing. Colombia is located again in the

touroperator map as a great destination for visitors”…destination for visitors”…

Destination of the World News. Dubai Magazine. September 2008

Some success stories …

Projects in the Caribbean: 2009-2011CARTAGENA: 2433 roomsSeaway 935 - Sonesta: 100

Ocean Tower: 280

Related Group: 200

Decameron Baru: 300

Hotel Las Americas: 250

Hyatt: 200

Estelar: 335

Otros proyectos : 768

BARRANQUILLA: 800 roomsHotel Sonesta: 113

Smart Suites (Royal):

•Santa Marta: 268 rooms

Investment of national hotel chains (268)

Smart Suites (Royal):

Hotel Dann: 105

Hoteles Estelar: 170

Projects in the Andean Region. 2009-2011

MEDELLIN: 608 new rooms

BOGOTA: 2239 new roomsJW Marriot: 269

Marriot: 249

NH: 150

Accor: 216

Sonesta: 127

Hyatt: 377

IHG-Holiday Inn: 76

Hilton: 245

Hoteles Estelar: 134

Otros proyectos: 400 habitaciones

MEDELLIN: 608 new roomsAccor: 180 Hoteles Estelar: 128

Otros proyectos: 300

CALI: 365 roomsStarwood - Sheraton by GHL: 93Otros proyectos: 272

[1] ibs

1. Colombia. Great destination for business and investment

2. World recognizes our work

3. Reasons to invest

Foreign Direct Investment to Colombia has grown significantly during six years

US$ Million

+395% in 2002-

Foreign Direct Investment to Colombia, 2000-2008(pr)(US$ Million)

Foreign Direct Investment to Colombia by sector, 2008(p)(Share in total)

Retail, hotels

and restaurants

Transport and

Communications

7%

Construction

3%

Services

1%

Primary sectors

0%

Electric

power, gas and

water

0%

US$ Million

Source: Central Bank (Banco de la República), Balance of Payments

(pr) Preliminary

+395% in 2002-2008

Mining

54%

Manufacturing

13%

Financial

12%

and restaurants

10%

Source: Central Bank (Banco de la República), Balance of Payments

(p) Provisional

Colombia

Country Ranking 2007

Ranking2009

Chile 28 40

Colombia 79 53

México 43 56

Perú 65 62

Second most “business friendly” country in Latin America Doing Business 2007-2009

Two years in a row as the first reformer in Latin America (2009)

Colombia improved 26

positions in two years!

Perú 65 62

El Salvador 71 72

Panamá 81 81

República Dominicana

117 97

Argentina 101 113

Costa Rica 105 117

Brazil 121 125

Ecuador 123 136

Venezuela 164 174Source: Top reformers report. World Bank

Exempt income

Hotel services provided in new hotels built between 2003 and 2018, during 30 years.

Hotel services provided in hotels remodeled and/or expanded up to 2018, during 30 years, prorated to the amount that the cost of remodeling and/or expansion represents with regard to the total taxable cost of the remodeled

Legal Incentives

expansion represents with regard to the total taxable cost of the remodeled or expanded piece of real estate.

Ecotourism services, during 20 years beginning in 2003.

Income-deductible expenses of the 40% of the amount invested in productive real assets acquired

Sales TaxDifferential VAT rate of 10% for lodging services.

VAT exemption for air tickets and tourist packages.

Free Trade Zone for services - Legal benefits

Legal Incentives

Single 15% income tax rate

No customs taxes (VAT or customs duties) accrue on imports to FTZs

Possibility of exporting from FTZs to other countries as well as to domestic markets

Exports from FTZs benefit from international trade agreements

Special Free Trade Zone for Services

This is the special system whereby Free Trade Zone status is granted to an individual company undertaking a new investment project. In order to qualify, the company must meet one of the following investment and job creation ranges

Investment (Millions US) Direct jobs to be created

US$ 2 –US $9.1 500US$ 2 –US $9.1 500

US $9.1 US$ 18.3 350

US $ 18.3 OR MORE 150

COP 2500 (Colombian pesos)

If the project covers various geographical areas, t he company may request that an exception be made to declare all su ch areas

Special Free Trade Zones.

Legal stability agreements

LSA are one of the tools that foreign investors have to consolidate safe and stable investments in Colombia.

An investor interested in entering into a legal stability agreement must submit an application before the Ministry of Trade, Industry and Tourism, along with a study showing the origin of the resources to be used to make the new investment or increase an resources to be used to make the new investment or increase an existing one, and a detailed and accurate description of the activity, including feasibility studies, drawings and technical studies required by the project, and an indication of the number of jobs the project is expected to generate

Proexport support your investment process

In the last few years, Colombia has experienced a marked improvement in its macroeconomic performance, internal security and stability for businesses. As a result social indicators have improved dramatically.

Colombia has achieved a solid structural growth, based on an increase in the investment rate and higher productivity levels.

The country has guaranteed its external funding for 2009 trough multilateral institutions such as IADB, WB and CAF.institutions such as IADB, WB and CAF.

Colombia is aggressively negotiating trade and investment agreements expanding its markets and becoming more attractive to investors.The Colombian Government is committed to generating the most favorable conditions for domestic and foreign investment instruments such as the free-trade zones regime and legal stability contracts

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